Eurogroup Chief ‘Tainted’ by Dutch Rescue Plans, Frieden Says

Dutch Finance Minister Jeroen Dijsselbloem, who took over as head of the group of euro-area finance chiefs this year, is “tainted” by debates over bank rescues in his home country, Luxembourg’s Luc Frieden said.

After succeeding Luxembourg Prime Minister Jean-Claude Juncker in the Eurogroup post in January, Dijsselbloem led an all-night meeting of the ministers on March 15-16 that agreed unanimously to tax Cypriot bank deposits as part of a bailout package for the country. That deal was rejected yesterday by the nation’s parliament in Nicosia.

“Mr. Juncker would probably have listened more to some countries than the current chairman, who is doing his job very well, but at the same time is also tainted by the heavy debate on the rescue plans in his own country, the Netherlands,” Frieden, his nation’s finance chief, told Luxembourg radio RTL in an interview today.

In the Netherlands, Dijsselbloem nationalized SNS Reaal NV on Feb. 1 after losses on real-estate loans brought the lender to the brink of a collapse. The nationalization, which became irrevocable after a ruling from the highest Dutch administrative court on Feb. 25, included issued shares, subordinated bonds and loans. The Dutch government said senior bondholders were excluded from losses because the EU does not yet have a bank-resolution framework.

The SNS nationalization came less than five years after the Netherlands bought Fortis’s Dutch banking and insurance units and its stake in ABN Amro Holding NV for 16.8 billion euros ($21.8 billion) when the company ran out of short-term funding, customers withdrew deposits and investors lost confidence. The government also provided aid to ING Groep NV, the biggest Dutch financial-services company, and Aegon NV at the time.

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